DKNY FINALLY READY WITH JEANSWEAR LINE: IT’S NOT JUST FOR TEENS

Byline: Janet Ozzard

NEW YORK — Donna Karan doesn’t want to be just another teenager’s logo.
The women’s end of the new, much-awaited, long-delayed, denim-based DKNY jeanswear business will open for spring selling on Monday, and Karan wants to be perfectly clear that she’s not just going for the typical junior jeanswear customer.
Donna wants the whole market.
“It’s a generational thing,” she said. “It isn’t about just being edgy. Jeans are a universal language. Some young kids are into one thing, and that’s cool. But I need my jeans.”
Karan hopes other people need her jeans as well. But the designer denim market has been saturated over the last two years as Polo Jeans Co. and Tommy Hilfiger’s Tommy line entered a market also occupied by CK Calvin Klein and Guess.
Indeed, the squeeze is getting tighter. Next, Hilfiger will launch Tommy Jeans for women, the adjunct to his successful Tommy Jeans men’s line. All of these lines have a benchmark $48 retail price for five-pocket jeans; all have major marketing campaigns; all have fully merchandised related apparel lines, and all are going after the same prime space on the retail floor.
At the same time, Karan desperately needs this jeans business to be successful. Since going public a year ago, the company’s stock has traded well below its 52-week-high of 25 1/2. It closed Wednesday on the New York Stock Exchange at 13, down 1/4.
The DKNY bridge line, whose healthy 22.7 sales gain last year had significantly helped Karan’s earnings, fell off this spring as part of that category’s general decline. While such areas as Signature, a collection priced between designer and bridge, are doing well, Karan needs an influx of cash to get earnings up.
When Karan’s jeanswear licensing deal with Designer Holdings, which also manufactures the CK jeans line, fell apart in March, the stock sunk to its 52-week low of 8 7/8. The company was criticized for not following the increasingly typical designer strategy of licensing out various categories, thus generating a steady flow of royalty income.
But Karan had said that the deal with Designer Holdings fell apart because the licensee wanted to do more than just make denim; it wanted to manufacture the full line of related apparel as well. That, said Karan executives, could potentially “cannibalize” the existing DKNY business and create confusion in consumers’ minds.
Karan is showing signs that, in some respects, she is ready to start acting like the rest of Seventh Avenue. The company hired John Idol, a former Polo Ralph Lauren executive, as chief executive officer, and Karan relinquished that part of her title at the beginning of August, saying she would focus on design. Executives have also said they are close to selecting a licensee for the money-losing beauty business and expect to do so in the third quarter of this year.
But DKNY Jeans is an in-house business and is another step in the strategy the company calls “segmentation,” implementation of which began a year ago.
At that time, Karan said she would create separate businesses for her Collection, Signature, D and DKNY labels. Each label would have a clearly distinct identity, but the total presentation would cover the entire sportswear market from designer to better.
“In this way, we’re thinking like retailers, to clarify each brand for the consumer,” Karan told WWD a year ago. “Isn’t that the next stage? It’s just cleaner, simpler. Nonconfusing.”
DKNY now includes the bridge business, which encompasses tailored sportswear, the jeans line and a group called Classics, which includes casual weekend apparel such as fleece.
The DKNY Jeans line will launch in about 400 department stores, with in-store shops planned. According to Mary Wang, president of DKNY, there is “a multimillion-dollar ad campaign” in the works to support the spring launch.
There is some edge in the DKNY collection.
Included are the obligatory high tech fabrics, such as screen-printed nylon knit jersey, Lycra spandex and cotton T-shirts, a bias-cut denim dress with Day-Glo spaghetti straps, skinny low-rise jeans with nylon inserts at the ankle and a nylon windbreaker styled to look like a fireman’s coat, with aluminum hooks and reflective strips.
Karan said she took much of her inspiration from various uniforms and street cultures in New York City, including fire fighters, police officers, construction workers, mail carriers and bike messengers.
A floor-length skirt modeled to look like oversize jeans is “the homeboy skirt,” she said. Gray jeans with a stripe down the side seam are “mailman pants,” and baggy pants with zippers are “construction worker pants.”
The other side of the collection is aimed to provide the comfort of jeanswear: oversize cotton rib sweaters, loose cotton poplin cargo pants, natural linen jackets, feminine A-line skirts and camisoles with sheer bands. There are oversize men’s wear shirts tailored for women, classic flat-front khaki Bermuda shorts, big terry sweatshirts with reflective patches, enzyme-washed Bedford corduroy jackets and bright orange cotton camp shirts.
Wholesale prices run from $12.50 for T-shirts to $35 for some fleece pieces. Jeans and bottoms sell from $24 to $32.50.
There are plenty of DKNY details to make sure the consumer knows whose jeans she’s wearing: rubber patches on the clothes, designed to look like subway tokens, say “DKNY: The Official Uniform of New York.” Interior seams are taped with “DKNY Jeans” logos. A pocket tab on bottoms styles reads, “DKNY Jeans.”
But the jeanswear business is also about such humdrum but vital matters as replenishment and inventory. Wang said that certain styles — classic-fit and easy-fit jeans, for example — will be monitored by EDI. Most fabrics are sourced domestically and much of the line is manufactured in the U.S., with additional sourcing and manufacturing in Europe and Asia.
Wang declined to give a wholesale projection for DKNY Jeans’ first year, but when the deal was signed with Designer Holdings, the company was predicting a first-year volume of $85 million to $95 million. Ralph Lauren’s Polo Jeans Co., which had a similar launch plan a year ago, projected that it would become a $350 million line by the end of its third year. The CK jeanswear business, in its third year, currently does about $450 million in wholesale sales worldwide.

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